COMPAS Inc. Public Opinion and Customer Research

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1 Kyoto Protocol Intensifying Business Opposition CIBC/Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post for Publication May 20, 2002 COMPAS Inc. Public Opinion and Customer Research

2 Introduction Uncertain whether Canada will or will not ratify the treaty, Canadian business leaders are becoming more resolutely opposed to it even while many remain deeply concerned about the environment. These are the key findings from the current websurvey of CEOs and other business leaders conducted by COMPAS on behalf of the National Post under sponsorship of the Canadian Chamber of Commerce and CIBC. Intensified Opposition But Coin Toss About Whether Canada Will Ratify Coin Toss about Kyoto s Future Business leaders are unsure whether Canada would ultimately ratify the agreement, as shown in table 1. Table 1: As you may know, the Kyoto Protocol or treaty would commit Canada to cut emissions in 2010 to 1990 levels. Prime Minister Chretien has spoken publicly about his government s commitment to ratify the accord while some observers say that the federal government appears to be softening its stand. Several provincial governments led by Ralph Klein oppose the treaty. On a 100-point probability scale where 100 means Canada will definitely ratify the treaty and 0, definitely not, how probable is it that Canada will sign on? Mean 49.0 DNK/Refused 18 Kyoto Advocates Losing Ground As shown in table 2, business leader support for Kyoto, a minority position in February, is a smaller minority position today down to 17% from 28% in winter. A slight modification of wording may account for a small portion of the change (see footnote to table). However, there is a consistency of change throughout the survey in responses to those questions that were asked in both February and March, as explored throughout this report. The persistent tendency is for business leaders to express weaker support for arguments in favour of Kyoto and strong support for arguments against. 1

3 Table 2: Advocates of Kyoto say that the treaty would combat global warming at a moderate economic cost while its opponents believe that the treaty is an unworkable solution that would seriously damage Canada s economy, especially because the U.S. will not sign it. Would you say that [PROVIDE ALTERNATIVE REVERSE ORDERS BUT DO NOT FULLY ROTATE] Week 18* Week 30 Feb 25 May 17 The advocates are entirely right 9 5 The advocates are largely right Both sides have their merits The provinces led by Premier Klein are largely right The provinces led by Premier Klein are entirely right DNK/Refused 2 6 *Note: The response categories in Week 18 were: The Prime Minister is entirely right, The Prime Minister is largely right, Both sides have their merits, The provinces led by Premier Klein are largely right, and The provinces led by Premier Klein are entirely right While business leaders oppose Kyoto and appear to be opposing it more strongly, some remain supportive and many remain deeply concerned about the environment. The following are a range of verbatim responses: Kyoto is a politically expedient band-aid that has the potential to bend many economies out of shape and impose real costs without addressing some of the key problems and fostering real solutions. It has been estimated that full application would delay climate change by only a few years. Is this the best way to use financial resources? Kyoto would devastate certain economic sectors leaving many Canadians in regions dependent on these industries severely harmed. Kyoto is the creation of political elements in economies which are energy and resource consumers - primarily European. They devised a system that makes the exporting country pay, not the importing or consuming nation. There is no environmental rationale for this bias - it is simply political and Canada must protect its interests. Kyoto would not decrease global GHG production; it will only shift it to other countries. Kyoto targets do not go far enough in slowing climate change impacts. Climate change is real and will have serious impacts on Canada and Canadians. Canadians are heavy emitters of greenhouse gases. We need to assess the costs of the impacts (coastal damage, sea-level rise, flooding and drought, higher Arctic 2

4 temperatures), and then invest in technology to increase mitigation and adaptation efforts. From that perspective "made in Canada - and perhaps "made in North America" should serve us well. But if anything, we should strive to be more assertive in our targets, such as the position adopted by the New England Governors and Eastern Canadian Premiers in their 2001 Climate Change Action Plan (Aug 2001). Having a desire for a clean environment, and having reviewed the technical info., it is very clear that there is no scientific basis for the link made between manmade emissions and any perceived global warming The economic benefits of the Kyoto agreement are rarely tabulated when opponents consider the 'costs' - benefits such as technological advancement and innovation for the future, savings due to conservation and reduction on oil dependency (and protection from possible significant increases in oil costs in the near future), as well as reduction in the economic effects of wildly fluctuating petroleum pricing. With the way the U.S. has been behaving lately vis-à-vis international cooperation, we have to be very cautious about what we are willing to sign. No other country in the world is as affected by U.S. economic actions as Canada is. Kyoto Arguments Losing Ground Less Support for Pro-Kyoto Arguments As shown in table 3, support for the arguments favouring environmental action in general and the Kyoto treaty in specific is abating. In February, 52% agreed (scoring 5-7 on the 7-point agreement scale) that Global warming is occurring with dangerous speed and threatens coastal habitation compared to 43% today. In February, 50% agreed that without Kyoto, the major industrial countries would not take serious environmental action compared to 42% today. Another indicator of weakness in support for Kyoto is the small size of the minority who accept the view that the treaty is actually a very moderate document requiring modest steps given the environmental challenges being faced today. Thus, only 26% agree that far from being too radical, Kyoto is moderate, the least that we should do ; 55% disagree, scoring 1-3. Still another indicator of weakness is that anti-opec sentiment elicits at least as much support for Kyoto as the view that Kyoto is a moderate approach. Thus, 31% agree that Kyoto would make the world a safer place by reducing the demand for oil and therefore the power of oil-producing states like Iraq and Saudi Arabia. 3

5 Table 3: Please score each of the following messages in support of Kyoto on a 7 point scale where 7 means you are very persuaded and 1, the opposite. [ROTATE INTERNALLY AND WITH Q3] Mean DNK Global warming is occurring with dangerous speed and threatens coastal habitation Week 30 May Week 18 Feb Without Kyoto, the major industrial countries would not take serious environmental action Week 30 May Week 18 Feb Kyoto would make the world a safer place by reducing the demand for oil and therefore the power of oil-producing states like Iraq and Saudi Arabia Far from being too radical, Kyoto is moderate, the least that we should do Strong, Intensifying Agreement with Anti-Kyoto Arguments As shown in table 4, business leaders embrace strongly and at least as strongly as in February various arguments against the treaty. The idea of a made-in-canada solution is appealing, eliciting 65% support and 19% opposition today (the question was not asked in February). 4

6 The most strongly supported reason to oppose Kyoto is related to U.S. policy, and U.S.-related concern is at least as strong as it was in winter. Today, 71% agree (68% in February) that ratifying Kyoto would put Canada at a terrible competitive disadvantage vis-à-vis the U.S., which is not signing while 16% disagree (17% in February). Other anti-kyoto arguments also elicit at least as much support today as before, as shown in the table. Table 4: Please score each of the following messages for opposing Kyoto on a 7 point scale where 7 means you are very persuaded and 1, the opposite. [ROTATE] Mean DNK Ratifying Kyoto would put Canada at a terrible competitive disadvantage vis-à-vis the U.S., which is not signing Week 30 May Week 18 Feb We need a "made-in Canada" solution similar to the U.S. plan that would put more emphasis on technological development and tax breaks, with less ambitious targets for lowering greenhouse gas emissions A number of other energy-exporting countries have no intention of signing Kyoto Week 30 May Week 18 Feb As several business associations have stated, Kyoto would seriously harm the 5

7 Canadian economy and standard of living, costing billions of dollars each year Week 30 May Week 18 Feb Methodology The National Post/COMPAS web-survey of CEOs and leaders of small, medium, and large corporations and among executives of the local and national Chambers of Commerce was conducted May 14-16, Because medium and small companies are more numerous in the economy and hence among Chamber membership, actual respondents are drawn more from these strata than from the stratum of the largest companies. Because of the small population of CEOs and business leaders from which the sample was drawn, the study can be considered more accurate than comparably sized general public studies. In studies of the general public, surveys of n=193 are deemed accurate to within approximately 7 percentage points 19 times out of 20. The principal and co-investigators on this study are Conrad Winn Ph.D. and Robert Laufer. 6